Ybrant acquires Israeli firm for $13mn

Hyderabad-based emarketing solutions company, Ybrant Technologies, is acquiring Israeli online media solutions company, Oridian, for $13 million (approximately Rs 52 crore). A definitive agreement has been signed in this regard, which is yet to get the final approval from Oridian's shareholders.

While $1 million has been paid to a trust account of Oridian during the definitive agreement, $2.5 million is to be paid at the time of closing the deal in a week. Around $6 million will be released in 90 days from the date of closing and the remaining in nine months from then, M Suresh Reddy, chairman and managing director of Ybrant, said here on Tuesday.

Oridian, a privately-held company based out of Israel's IT hub, Herzliya, has 60 shareholders. While 10 per cent of the equity is owned by its chief executive officer Jacob Nizri and his management board, the rest is held by Israeli venture capital firms including Challenge, Infinity Fund and Invitech, through which the company raised $6.3 million in 2001. The eight-year-old company posted revenues of $20 million last year.

"This synergy will bring 60 employees of Oridian into Ybrant's fold, taking its total number to 320. Besides, it enables Ybrant to enter new markets including Germany, UK, France, Argentina, Australia, Scandinavia, Italy, Belgium and the Netherlands," Reddy said.

The acquisition of Oridian comes close on the heels of Ybrant acquiring US-based online ad-network firm AdDynamix for $10 million (around Rs 40 crore) early this year. It acquired US-based MediosOne and VoloMP, the flagship product of Seenietix, Serbia, last year for an undisclosed sum.

Globally, the digital marketing space is pegged at $35 billion, while it is at $40 million in India, which is expected to touch $160 million in the next three years.

To consolidate its position in the digital marketing arena via inorganic growth, the company is scouting for more acquisitions abroad, especially in the lead generation and search engine marketing space.

"We have identified four companies for acquisition, and listed them on our draft red herring prospectus that we had filed with the Securities and Exchange Board of India in September this year. We are in advanced stages of discussions with them, and three deals are expected to be seized in the next six months," Reddy said.

According to him, the company has set aside 3.5 million shares for its IPO, which is primarily aimed at funding its proposed buyouts. In a pre-IPO placement, Ybrant had earlier raised $20 million from New York-based private equity and hedge fund Sansar Capital by diluting 16 per cent (2.5 million shares) of its equity.

Ybrant clocked revenues of $24 million last year with a bottomline of $6 million. It forecasts around 50 per cent growth in revenues, organically.